AIMECHATEC, Ltd.'s (TSE:6227) market cap dropped JP¥1.7b last week; Individual investors bore the brunt

Key Insights

• Significant control over AIMECHATEC by individual investors implies that the general public has more power to influence management and governance-related decisions
• A total of 10 investors have a majority stake in the company with 51% ownership
• Institutions own 11% of AIMECHATEC

A look at the shareholders of AIMECHATEC, Ltd. (TSE:6227) can tell us which group is most powerful. We can see that individual investors own the lion's share in the company with 53% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And following last week's 10% decline in share price, individual investors suffered the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about AIMECHATEC.

View our latest analysis for AIMECHATEC

What Does The Institutional Ownership Tell Us About AIMECHATEC?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

AIMECHATEC already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see AIMECHATEC's historic earnings and revenue below, but keep in mind there's always more to the story.

AIMECHATEC is not owned by hedge funds. Tokyo Ohka Kogyo Co., Ltd. is currently the largest shareholder, with 18% of shares outstanding. For context, the second largest shareholder holds about 18% of the shares outstanding, followed by an ownership of 4.6% by the third-largest shareholder.

We also observed that the top 10 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of AIMECHATEC

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

We can see that insiders own shares in AIMECHATEC, Ltd.. It has a market capitalization of just JP¥15b, and insiders have JP¥163m worth of shares, in their own names. It is good to see some investment by insiders, but we usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 53% of AIMECHATEC shares. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Public Company Ownership

We can see that public companies hold 35% of the AIMECHATEC shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 4 warning signs with AIMECHATEC (at least 2 which can't be ignored) , and understanding them should be part of your investment process.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.